Big banks join the rate war, dropping below 3%

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Earlier this week the China Construction Bank led the way with a rate cut, which was followed by speculation that the mainstream banks would compete by moving just below the 3% mark. So far, we’ve seen two of the main banks drop their rates to now have a 2 in front of them.

Today, ASB has announced its two-year fixed rate of 2.99% while Kiwibank has introduced a one-year fixed rate of 2.99%.

ASB chief economist said that their two-year rate would put more money in people's pockets and give them more stability for a longer period. While Kiwibank general manager said they simply wanted to provide people with value and a point of difference.

Both mortgage rates are the lowest we've ever seen from either of these banks, and it won't be long until the other big five banks also lower theirs.

Will we see mortgage rates drop any lower?

With OCR expected to tempt the negative zone, economists and experts are still suggesting that this may be the lowest we'll see the rates go to. However, the OCR is set to remain where it is for another 11 months, which is a long time, and things can change a lot in that space.

For all the latest mortgage rates, check out our rates table.

How does this impact me?